Correlation Between Kolon Plastics and Amogreentech
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics and Amogreentech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kolon Plastics and Amogreentech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Amogreentech Co, you can compare the effects of market volatilities on Kolon Plastics and Amogreentech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kolon Plastics with a short position of Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Amogreentech.
Diversification Opportunities for Kolon Plastics and Amogreentech
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kolon and Amogreentech is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech and Kolon Plastics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kolon Plastics are associated (or correlated) with Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of Kolon Plastics i.e., Kolon Plastics and Amogreentech go up and down completely randomly.
Pair Corralation between Kolon Plastics and Amogreentech
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 2.54 times less return on investment than Amogreentech. But when comparing it to its historical volatility, Kolon Plastics is 1.42 times less risky than Amogreentech. It trades about 0.19 of its potential returns per unit of risk. Amogreentech Co is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 525,000 in Amogreentech Co on October 11, 2024 and sell it today you would earn a total of 96,000 from holding Amogreentech Co or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Kolon Plastics vs. Amogreentech Co
Performance |
| Timeline |
| Kolon Plastics |
| Amogreentech |
Kolon Plastics and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Amogreentech
The main advantage of trading using opposite Kolon Plastics and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics position performs unexpectedly, Amogreentech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Amogreentech will offset losses from the drop in Amogreentech's long position.| Kolon Plastics vs. Leaders Technology Investment | Kolon Plastics vs. Korea Investment Holdings | Kolon Plastics vs. Coloray International Investment | Kolon Plastics vs. SBI Investment KOREA |
| Amogreentech vs. Hyundai Engineering Plastics | Amogreentech vs. ABOV Semiconductor Co | Amogreentech vs. LG Household Healthcare | Amogreentech vs. Samick Musical Instruments |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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